S&P zaps Hawaiian Electric to junk

S&P said it downgraded Hawaiian Electric Industries Inc. (HEI), and its subsidiaries, Hawaiian Electric Co. Inc. (HECO), Maui Electric Co. Ltd. (MECO), and Hawaii Electric Light Co. Inc. (Helco) to BB- from BBB- for HEI and BBB for the subsidiaries. The agency also placed the ratings on CreditWatch with negative implications.

In explaining the downgrades, S&P cited the devasting fires that caused nearly 100 deaths and an estimated cost of rebuilding of about $5.5 billion as well as the class action suits filed against HEI and its subsidiaries.

“The CreditWatch placement with negative implications reflects the potential for additional downgrades of one or more notches within the coming months. This could occur if it is determined that the company contributed to the wildfires or if the company loses consistent access to the capital markets.

“We will continue to closely monitor future developments, including management's strategic plan for restoring credit quality, and expect to resolve the CreditWatch placement pending further updates,” the agency said in a press release.

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